Things to Know Before You Sell Your Business

Selling a business is one of the most significant decisions an entrepreneur can make.

According to the U.S. Small Business Administration (SBA), there are more than 400,000 small businesses in Oregon, representing more than 95% of all businesses in the state. At Ferguson Wellman, approximately 17% of our individual clients generated their wealth through the sale of a business. Aside from being a meaningful financial transaction, it is also a life transition that impacts your legacy, family, employees and future. Approaching the process in the right way can lessen anxiety, maximize value and ultimately help the transaction close more quickly.

What type of sale fits best?

Owners should consider a variety of exit strategies before pursuing a sale. They can include a third-party sale, family transfer, transition to key employees and sales to an employee stock ownership plan (ESOP). Each path has unique advantages and challenges, and understanding which structure aligns most with your goals will help you approach the process with confidence. Family transfers can be deeply rewarding but require careful consideration of value, cashflow and the next generation’s readiness. Sales to key employees may offer continuity but often involve increased risk for the seller. ESOPs can provide liquidity and tax benefits, but typically require long-term planning and may not deliver immediate proceeds.

Personal motivation and commitment

Understanding your motivations for selling is crucial for success. For many entrepreneurs, their business is more than an asset. It represents their life’s work and their identity. Sellers must honestly consider their reasons for selling, whether it’s to optimize value, pursue new opportunities or achieve financial peace of mind. Transitioning from CEO to consultant or retiree can be challenging. Get a professional assessment of the financial impact of the decision to help consider which type of sale fits best.  

Timing: the three realms

Timing is often driven by a combination of personal factors, company performance and market conditions. Successful exits require balancing all three.

Buyers will always look for upside potential, while sellers aim to maximize value of a business sale. Owner-specific issues, such as the desire to retire, financial security and estate planning, also play a pivotal role. Selling during a strong market can significantly increase transaction earnings before interest, taxes, depreciation and amortization (EBITDA) multiples. It can be tempting for owners to try to slightly improve financial performance when the greater value may come from leaning into the proper point in the merger and acquisition cycle.

Maximizing value: come prepared

A well-orchestrated sale process is key to maximizing value. Your advisory team should include an investment banker, transaction attorney, estate planning attorney, tax professional and wealth advisor. Separating personal and company finances, paying competitive salaries and addressing real estate can simplify the due diligence process. Stabilizing the management team and establishing a realistic valuation range are also critical. Bringing all potential buyers into the process at the same time and avoiding the “bear hug”, being seduced by a single buyer, helps maintain negotiating leverage and increases the likelihood of a successful outcome.

Preserving versus creating value

It’s often easier to preserve value than to create it. Effective income tax planning, charitable planning and transfer tax strategies can help owners retain value. Structuring the sale as a stock sale or asset sale, leveraging qualified small business stock, and using charitable trusts can all provide significant tax advantages. Owners should also consider their legacy plans such as gifting shares at pre-liquidity valuations or using trusts to benefit heirs and philanthropic causes.

Run a process, not just a sale

Running a comprehensive and competitive process maintains sellers’ leverage to negotiate terms and optimize transaction value. Enlisting an experienced professional team will help you prepare, consider broader impacts, and negotiate a successful sale. After all, selling a business is about more than the numbers. It’s about securing your legacy, supporting your family and setting the stage for your next chapter.

Ferguson Wellman Capital Management firm manages $10.6 billion in assets for 1,085 individual and institutional clients. (data as of 12/31/2025)

Disclosure

This material is provided for informational purposes only and does not constitute investment advice. Opinions and statements of financial market trends based on current market conditions constitute our judgment and are subject to change without notice. The views expressed herein are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. Due to the rapidly changing nature of the financial markets, all information, views, opinions and estimates may quickly become outdated and are subject to change or correction.